Argentina ‘can’t pay’ in battle over debt

Argentina’s battle with a group of “vulture” hedge funds intensified today after Buenos Aires insisted it will now be “impossible” to pay the money it owes creditors on 30 June.

The South American country has been engaged in a protracted legal fight with a group of bondholders who have repeatedly refused to take part in a restructuring of $100 billion (£59 billion) of Argentine debt.

Earlier this week, a US court declined to hear an appeal by Argentina against a ruling that the country should pay what it owes the hedge-fund holdouts in full.

“[This] makes it impossible to make the next payment on restructured debt in New York, and shows a complete lack of willingness to negotiate,” said a statement from the Argentine economy ministry.

The hedge funds, which acquired the debt at a steep discount, are led by NML Capital, a division of Paul Singer’s Elliott Management Corp, and Mark Brodsky’s Aurelius Capital Management.